Wenner Corporation would like to use target costing for a new product it is considering introducing. At a selling price of $44 per unit, management projects sales of 10,400 units. The new product would require an investment of $904,000. The desired return on investment is 10%.The desired profit according to the target costing calculations is:
A) $90,400
B) $367,200
C) $45,760
D) $457,600

Question

Quizplus · Accepted Answer

The desired profit is calculated as the investment ($904,000) multiplied by the desired return on investment (10%), which equals $90,400.

Wenner Corporation Would Like to Use Target Costing for a New